A group of 35 former federal judges has filed a motion in federal court seeking to reopen President Donald Trump’s dismissed $10 billion lawsuit against the IRS, arguing the parties perpetrated a “fraud on the court” by concealing a settlement agreement while the case was pending. (Motion for relief from judgment or order, Trump v. IRS, No. 26-cv-20609, 5/27/2026)
The motion, filed May 27 in the U.S. District Court for the Southern District of Florida, asks the court to invoke its authority under Federal Rule of Civil Procedure 60 to set aside the case’s dismissal and resume its inquiry into whether the lawsuit presented a genuine “case or controversy” under Article III of the Constitution. Among the movants are retired 4th Circuit Judge Michael Luttig and retired District of Massachusetts Judge Nancy Gertner.
Background
The lawsuit was filed January 29, 2026, by President Trump, his sons Donald Jr. and Eric, and The Trump Organization, alleging the IRS and Treasury failed to protect their confidential tax returns from unauthorized disclosure by former IRS contractor Charles E. Littlejohn, who was sentenced to five years in prison for the leaks.
The case was voluntarily dismissed May 18 under Federal Rule of Civil Procedure 41(a)(1)(A)(i), two days before a court-mandated deadline for the parties to address whether the court had jurisdiction.
In her order closing the case, U.S. District Judge Kathleen M. Williams noted that the dismissal notice “does not reference any settlement or include a stipulation of settlement” and that the defendants “neither submitted any settlement documents nor filed any documents ensuring that settlement was appropriate where there was an outstanding question as to whether an actual case or controversy existed.”
The Department of Justice (DOJ) publicly announced a settlement the same day. Acting Attorney General Todd Blanche signed an order directing Treasury to transfer $1.776 billion to the newly created “Anti-Weaponization Fund” to compensate individuals claiming to be victims of government “weaponization or lawfare.” A separate addendum signed by Blanche on May 19 permanently bars the government from pursuing claims against the President, his family, and affiliated entities, including tax audits of returns filed before the settlement date.
Motion Alleges Fraud on the Court
The former judges contend the court was deceived. They argue the parties entered into a settlement agreement that required the plaintiffs to dismiss the case before revealing its terms, preventing the court from completing its jurisdictional inquiry.
“The purported ‘settlement’ that the parties never placed before this Court raises profound questions about the parties’ candor toward the Court and manipulation of the judicial system, which threatens to undermine confidence in the administration of justice,” the motion states.
The motion invokes Rule 60(d)(3), which allows courts to set aside a judgment for fraud on the court, and Rule 60(b), which permits relief from a final judgment for fraud or other extraordinary circumstances. The former judges also argue the court has inherent authority to act on its own motion, citing Universal Oil Products Co. v. Root Refining Co. , 328 U.S. 575 (1946).
On standing, they cite 11th Circuit precedent establishing that in “extraordinary circumstances,” a non-party may seek Rule 60 relief based on fraud on the court, noting that parties to a collusive scheme will never challenge the fraud themselves. The motion also relies on the Supreme Court’s 2025 decision in Waetzig v. Halliburton Energy Servs., Inc. , 604 U.S. 305, which unanimously held that a voluntary dismissal under Rule 41(a)(1)(A)(i) is a “final judgment, order, or proceeding” subject to Rule 60 review.
Particularly significant to the collusion argument is the government’s failure to assert basic defenses it raised in nearly identical cases arising from the same Littlejohn leaks, including statute of limitations arguments and the contention that Littlejohn, as a contractor, was not an IRS officer or employee for purposes of the relevant statute.
“That the government has actively opposed nearly identical claims brought by different plaintiffs against the IRS only emphasizes the fraudulent nature of the ‘settlement’ reached here,” the motion states.
The former judges further argue the Anti-Weaponization Fund lacks the legal foundation needed to draw from the Judgment Fund. Blanche cited 31 U.S.C. § 1304 and compromise settlement authority under 28 U.S.C. § 2414 as the statutory bases for the fund. Both authorities require the existence of a genuine case or controversy, the former judges argue, and a feigned or collusive suit does not satisfy that requirement.
Broader Backlash
The filing is the latest in a series of challenges to the settlement. Congressional Democrats have demanded documents and answers from Treasury, DOJ, and the IRS, and have called on the Treasury Inspector General for Tax Administration to investigate whether the settlement violated the Internal Revenue Code.
Some Senate Republicans have also expressed concern, and a $72 billion immigration enforcement spending bill became a vehicle for debate over the fund before the Senate called timeout on it, Reuters reported.
At the state level, California Governor Gavin Newsom (D) announced plans to impose a 100% tax on any fund payments received by California residents. “One thing I think we’re going to try to do is tax 100%. Anyone from California who receives any of those funds, we want to tax 100% of those proceeds and that’s an action the state of California can take,” Newsom said, according to Reuters. Newsom did not indicate when the tax would take effect.
On Friday, U.S. District Court for the Eastern District of Virginia Judge Leonie Brinkema temporarily blocked the Trump administration from proceeding with the establishment of the fund. The order arose from a lawsuit filed by Democracy Forward, one of several cases filed in the wake of the settlement.
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